The Makhado Municipality does not seem to care about its employees or about families being left destitute when employees pass away. This grave allegation is contained in a formal affidavit filed by the National Fund for Municipal Workers against the Makhado Municipality.

In the affidavit, the Makhado Municipality is described as "the worst client any fund can have..." and the court is requested to compel the municipality to honour its obligations towards its employees.

The national fund’s trustees say the Makhado Municipality is in blatant breach of the relevant law and its obligations towards its employees and towards the fund. The trustees are requesting the court to compel the Makhado Municipality to reinstate all its employees (also those who joined since June 1, 2007) as members of the national fund and to pay over all their contributions, including arrears and interest on contributions which the Makhado Municipality unilaterally ended. The amount payable by the municipality could be well over a million rand.

In June this year, the municipal manager, Ms Faith Muthambi, confirmed that Council, under pressure from the municipal workers union SAMWU, decided to terminate SAMWU members’ compulsory membership of the national fund, to allow them "their democratic right" to become members of their fund of choice. She could not confirm at the time that an alternative fund was in fact in place. She said then that Council was acting on legal advice and could defend its action in any court of law.

The national fund was registered in terms of the Pension Funds Act and the Income Tax Act and in compliance with the terms of the Labour Relations Act as a contributional retirement fund. By law, membership of the fund is compulsory for all employees who are employed by a local authority. Municipalities must make monthly (2%) deductions from the salaries of its employees and also add its own (2%) contribution in this regard. Membership can only be terminated upon death, disability or termination of service.

The fund is now seeking a court order to compel the municipality to comply with the relevant legislation. The municipality is also obliged not to act detrimentally towards its employees. Its obligations include making sure that there is provision for instant death claims where employees pass away and dependents are left destitute.

The trustees of the fund say they base their claim purely on the legal obligation to protect their members’ interests at all times and not on financial gain. It highlights this fact by pointing out that, before the municipality ceased paying over its own contributions and the salary deductions for the approximately 400 employees, the total amount of the contributions (R1 363 664) was exceeded greatly by the claims (R1 912 657) which had to be paid out. In this regard, the municipality is referred to as "the worst client any fund can have" because of the numerous deaths, many as a result of AIDS.

The affidavit claims that members (employees of the municipality) suffer severely as a result of the fact that their employer ceased to pay over their contributions. It states that the unilateral action by the Makhado Municipality resulted in the termination of members’ insurance and caused the cover for their dependants to lapse. Some of these employees passed away and their dependants were left destitute in that there were no valid claims which they could lodge for insurance cover.

"Apart from the widows of male employees who had passed away, their children also suffered severely. The widows were left destitute and the children could not carry on their schooling or further tertiary education, in that there was simply no money in this regard," the affidavit reads.

In the affidavit, reference is also made to the fact that the Makhado Municipality’s own legal representative advised it not to cease making and paying over the contributions to the fund. The municipality, however, decided unilaterally to abide by a previous "ruling", which the affidavit rejects as void ab initio, because the fund was not a party to the "so-called ruling".

The affidavit also refers to various attempts by representatives of the fund "to bring the municipality to its senses." Despite representatives of the fund travelling to Louis Trichardt, the Makhado Municipality cancelled the meeting.

The document states: "While the trust/fund has the interests of its members, the employees of the municipality, at heart, it is clear that the Makhado Municipality does not seem to care about its employees".

A spokesperson for the Makhado Municipality, Mr. Louis Bobodi, confirmed this week that the document is receiving attention.

The Makhado Municipality will probably have time until the middle of January next year to lodge its formal reply to the affidavit, before the court will consider the matter for a final ruling.